Health-care reform

Succeeding by failing

EZRA KLEIN'S latest Bloomberg column nicely captures the oddity of the American debate over health-care reform. Mr Klein notes that the plan for Medicare reform in Paul Ryan's latest budget plan is hard to distinguish from Obamacare (which turned two years old today). That might seem ironic if Obamacare weren't basically the policy Republicans had been defending for years as an alternative to Democratic single-payer proposals. The result is a peculiar sort of convergence even as the two parties try to push the health-care system in different directions. Mr Klein writes:

[The Republicans have] opted to apply their old policy framework -- the one the Democrats stole -- to Medicare. That has left the two parties in a somewhat odd position: Democrats support the Republicans' old idea for the under-65 set, but oppose it for the over-65 set. Republicans support the Democrats' new idea for the over-65 set, but oppose it for the under-65 set.

This isn't quite as incoherent as it seems. Democrats say they would prefer Medicare-for-All for the under-65 set, but they'll take whatever steps toward universal health insurance they can get. Republicans say they would prefer a more free-market approach for the over-65 set, but that a seniors' version of “Obamacare” is nevertheless a step in the right direction. For both parties, it's the direction of the policy, rather than the policy itself, that matters.

It is ironic that conservatives spent years arguing for health-care policy they now claim to be illegal. The irony will be all the more piquant if the Supreme Court, which will begin Monday to entertain oral arguments on the constitutionality of the individual mandate, rules in the conservatives' favour. And what if they do?

According to Mr Klein:

If the Affordable Care Act is repealed by the next president or rejected by the Supreme Court, Democrats will probably retrench, pursuing a strategy to expand Medicare and Medicaid on the way toward a single-payer system. That approach has, for them, two advantages that will loom quite large after the experience of the Affordable Care Act: It can be passed with 51 votes in the Senate through the budget reconciliation process, and it's indisputably constitutional.

That is to say, if the Republicans knock down Obamacare, one way or another, Democrats will push a Medicare-for-everybody single-payer plan. If Mr Klein is right, this raises an interesting question. Should single-payer-loving Democrats root for a ruling against the mandate? It would seem that if Mr Obama can hold onto the White House, and Democrats can hold onto at least 51 seats in the senate, a defeat at the hands of the Supreme Court could be a blessing for liberals. But suppose Mr Romney emerges victorious in November. Mr Klein argues that "...if the Affordable Care Act not only survives but also succeeds, then Republicans have a good chance of exporting its private-insurers-and-exchanges model to Medicare and Medicaid, which would entrench the private health-insurance system in America." Mr Klein points out that this is "not the strategy Republicans are pursuing", but my guess is that this is the way Mr Romney would go. Yet if the Supreme Court knocks down the individual mandate, and Mr Romney becomes president, what then? Romneycare/Obamacare for seniors and what for the rest of us? Mr Klein argues that if Mr Ryan's plan were implemented:

The nation's uninsured population would soar. In the long run -- and quite possibly in the short run -- that will increase the pressure for a universal system. Because Republicans don't really have an idea for creating one, Democrats will step into the void.

As a result, Republicans' long-term interests are probably best served by Democratic success.

Even if the Republicans win, they lose, and Democrats get everything they always really wanted! This sort of thinking is so wishful it's almost touching. Of course, one can always argue that even if Team Them wins, their policies are so boneheaded they will inevitably fail and therefore lead the public to demand the smart policies of Team Us. Perhaps it is so in this case. But the history of health-care policy in this country is a history of path-dependency and the accumulation of kludges. Team Us is most likely to capitalise on the failures of Team Them by adding new failures of their own. And vice versa.

Frankly, American healthcare for the population as a whole is and always will be a kludge. The GOP has absolutely no intention of replacing the Affordable Care Act with anything at all. They simply don't give a damn. The health insurance companies have basically created socialised medicine by dumping women, children, the old and the sick onto the taxpayers. If the Affordable Care Act fails, we will do what we always do: just muddle along. Sorry to be so bitter, but that's the way it is and will always be.

Your argument is specious at best and full of beckian demagogary at worst.

Nixon's 'leftist' (by current standards) failed. W's Medicare Part D, cost the nation $800 billion, is fraught with problems and so convoluted participation is quite low.

As for your solutions: 1)We all live with the system we have, 2) If you haven't been paying attention, individual citizens have been effectively frozen out of government (hence the Tea Party on the right and Occupy on the left - both of which have shouted a lot and done little, 3) Moving to another state is simply an absurd argument, reminiscent of the 'why don't you move to Russia' screed during the Cold War. Unemployment hovers around 9%, if you can find a job you're likely to be under-employed without benefits, let alone the cost and emotional upheaval of moving.

Are we to become 21st Okies, loading up our families and strapping our worldly goods to the roofs of our SUVs, then heading down Route 66 in search of better health insurance?

I think it's important to look at the fundamental problem of how medical care is provided for working age people today, namely that it is tied to employment. There's no reason why healthcare and employment should be conjoined, any more than healthcare should be tied to your swimming pool membership.
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There are good reasons, however, why it shouldn't. It reduces labor mobility, and therefore productivity. Workers get stuck in their company when they get a major illness, because other companies won't take on their healthcare costs. It also is a problem for American businesses as their costs are shifted from wages to benefits that are longer-term and often unpredictable. Automakers got caught when they miscalculated their liabilities.
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This whole ridiculous system came about when healthcare first came up in the United States. Unions pushed for universal healthcare, but instead ended up cutting a deal whereby employers, rather than the government, would end up providing the service, encouraged by making healthcare tax-deductible for corporations. It allowed the government to keep the costs off it's balance sheet, it reduced the tax burdens of big businesses like the big three, which were already providing healthcare for their workers, and it covered unionized workers who tend to work in big businesses. It also cut out less political important non-unionized workers.
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In conflating big business/big government/big union, it also strengthened all three by tying them together into a corporatist system. Since what should be a government system become outsourced to employers, it created an incentive for the government to protect them through regulations and tariffs against possible competitors. For example, the Big Three oligopoly was tolerated. It also promoted unionization, as healthcare rather than being assumed, was got through union pressure. If you wanted healthcare, you had to join a union. And the unions in turn would provide political pressure to support their businesses.
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This was government in the fifties, where there was a sort of haphazard semi-planned economy. It all ended up coming off the rails however. The lack of competition stultified American businesses, for example the big three got taken out behind a tool shed by Toyota, healthcare costs skyrocket driving American businesses into bankruptcy, the New Deal approach to government died amid stagflation and gas lines, and the unionized share of the workforce declined precipitously.
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Actually, it never really could have worked for long. What's necessary in today's economy is to switch to an individualistic system whereby workers are allowed to choose their own healthcare and it is portable across jobs. This promotes, and is required by, worker mobility. Unfortunately, rather than fix this fundamental in American healthcare, Obama wanted to try to keep it working by using sticks (fines) as well as carrots to get universal coverage.
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If you think about it, the two parties were on exactly the wrong sides of providing healthcare, as republicans are far less likely to have coverage and democrats (more likely unionized workers / government employees) already have healthcare. Also, if the government bore the cost, as it should, that would in effect be a huge tax-cut on corporations.
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To come back to the theme of this blog post, healthcare would become a lot more efficient if employers drop their plans and shift the responsibility back onto the government where it should be. Obama miscalculated the fines he needed to levy, and so has been trying to plug holes by cutting side deals with various large employers like McDonalds. Eventually, though, this won't work, and Obamacare might actually lead to some sort of sensible approach to healthcare, despite all his efforts to prevent that.

What's your insurance premium?
(But you're missing my point) You are fortunate to have a good job with awesome insurance, which gets you access to this awesome medical care. Meanwhile, 60 million Americans are uninsured. If it wasn't for the fact that you do support mandatory catastrophic coverage, I'd accuse you of doing a "let them eat cake" defense.)
In Taiwan, everyone has access to 6 dollar MRI's (provided that they can provide a medically valid reason for requesting one.) and it's not tied to their job. (though premiums are about 60% cheaper if you're employed as the cost gets split with the employer in that case. It provides both an incentive to work without penalizing switching jobs, a big plus for labor mobility.)

How you get it to $500 from $1000 is the bigger problem. Higher admin costs doesn't help getting there in reality since there are a number of entities that need to share that $500. If you start with a $500 MRI with 50% admin costs, it will soon inflate to a $1000 MRI with 50% admin costs.

Another way to look at it is that the admin costs are the least productive in the delivery of healthcare and should be minimized to make the whole system more cost-efficient.

That's not really true. None other than Richard Nixon proposed major reform for the system in the 1970s. George W. Bush expanded prescription drug coverage, much to the chagrin of some.
The situation is frustrating, but it doesn't need to be. What Americans need to do is get back to the federalist mindset of live and let live. The states have the ability to create whatever health care systems they want. Let them do so. The feds can help by getting out of the micromanagement business and provide the states with block grants.
Then, an American citizen living in a particular state is presented with three choices: 1) Live with the system they have, 2) Get involved and work to change it or 3) Move to a state with policies more to their liking. That is the beauty of a federal system. Ample choice, ample tolerance. If only people would understand that and make better use of it.

A no vote on top of Bush vs Gore and Citizens United will be the death blow to the credibility of the Supreme Court. The Health mandate saves lives. If the Supreme Court cannot get beyond this then we have officially become a banana Republic.

It wasn't "free". You just didn't have to pay directly for the service at the time. If you pay for health insurance you have probably paid much more for the insurance than for the services you receive. (At least most people do as that's the principle insurance works on). Even if your insurance is employer paid, that's money that you are NOT getting in YOUR paycheck.

It's not the doctors costs that are out of control, it's the insurance companies and their networks. I go to "out-of-network" docs all the time and pay out of pocket. Their costs are 1/3 to 1/4 what services cost "in-network".

What baffles me here is that the Insurance companies are the big winners under the mandate as they pick up 30 million new clients. The public is served by coverage from a somewhat shitty plan compared to a Medicare for all Public option, which is what the left wants.

So the Republicans, tools for the Insurance industry, that now have a Heritage founded plan in place, would rather blow it up, screw the insurance companies and screw the public in order to make Obama look bad.

That is about as cynical as it gets. Mitch McConnell, Cantor, Boehner, Ryan and the conservative stooges on the Supreme court should go to jail for treason as they are destroying the country.

At a high level of granularity, the noted paradox exists. But not when you look into the details.

For example, the insurance lobby is all for the individual mandate and unless the Supreme Court strikes it down, will fight to keep it. They will side with the Democrats on that fight to keep it regardless of who wins.

But the lobby is against all the regulations of Obamacare on them, such as minimum coverage, no rescission, no use of pre-existing conditions, etc. They will side with the Republicans on that regardless of who wins.

So regardless of what happens politically, that kind of fight on the details will still happen. By goading the politicians to play the Us vs Them game which the citizenry happy to take sides with as much logic as picking a team to win the SuperBowl, the insurance lobby will try to arrive at a solution that has the individual mandate but with no regulations on how they provide coverage and how much they charge and therefore how they will ration medical care. In some circles, this kind of rationing by private enterprise is considered acceptable.

Same thing with issues that affect Pharma companies.

Eventually, it will come down to corporate interests vs individual interests with Government (taxpayer) money on the sidelines to award the winners of that battle.

Until then it is just a charade where the stated positions of the two parties on health care seldom match their motivations.

Can we stop this admin cost nonsense. Which genius came up with this as a measure of efficiency? Which is preferable a $1000 MRI 30% ($300) of which is admin costs or the same MRI for $500 50% ($250) of which is admin costs?

Insurance is perhaps the most socialist aspect of a capitalist economy. But without insurance capitalism would not exist.
If there was no Lloyd's then English mercantilism would not have taken off. If English mercantilism had not taken off we would most likely not have a Capitalist economy as we know it today.
"The loss of a few borne by the non-losing many" is basically insurance.
In an absolute conservative world insurance should be anathema.
Regardless of whether you pay your premium to the government or a private insurer, you are essentially paying for not your own coverage but the coverage of all. That is as close to socialism as it gets.
In a state like Wisconsin, where there are more drunk-driving incidents than in any other state, auto insurance rates will be higher for you even if you haven't touched alcohol in your life.
In a state like Mississippi, where the average life expectancy is lower than many other state, term life policies will cost more for you, even if you are a fitness instructor and enrolled in weight watchers.
Unless the conservative movement in the US is willing to shuck insurance altogether, all their arguments about individual mandates and death panels and all that is just bupkis.

Despite your diatribe, you are simply wrong. The constitutional question is not whether government can force citizens to purchase something from "corrupt" companies. It is whether the federal government can force citizens to purchase something from ANY company. If the answer from SCOTUS is no, then Social Security privatization is also gone.

1) The system goes back to really all private like the 80s (you got no money you die)
2) We nationalize the damn doctors and nurses -- what the Brits, Belgians, etc., did: WW2? Health care. (The moore movie)
3) We continue to give money to doctors, nurses and pharma out of proportion to their usefulness

For myself, it's #3 that's the stinker. It's also the most likely. Here in Korea a visit to the doctor costs ~5 dollars (plus $42 per month): thank you Samsung.

As a policy proposal, I'd say just let employers drop their coverage and shift that responsibility over to the government where it belongs. Abolish the employer-provided healthcare deduction, as well as the fines in Obamacare, and you could leave much of the rest of the system in place.
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Interestingly, if marginal rates are cut employers in exchange for reductions in loopholes, as both parties say they want to do, there will naturally be even less encouragement for employers to provide healthcare anyway.